Market Trends and Condition

As of the end of the third quarter of 2011, Fannie Mae had 122,616 single-family REO properties on its books and Freddie Mac held 59,596.

Imagine these homes hitting the market all at once.

CNNMoney.com ran an article this week about 7 amazing foreclosure deals in various cities around the country. Here’s a summary of the details of these deals:

• North Las Vegas – Last sale of this home was for a price of $172,000. It has 3 bedrooms and 2 baths and was valued at $214,000 in 2007. Only six years old and in very good condition, it’s listed now at $79,900.

• East English Village in Detroit – Sold back in 2008 for $49,900, this home is now listed for just $15,900. It’s in a well kept neighborhood, has 3 bedrooms and 1.5 baths. It does need a new furnace and kitchen remodel.

• Royal Palm Beach Florida – Built in 1984, this home has 3 bedrooms and 2 baths. It was last sold in 2007 for $218,000. It is listed now at $62,500.

http://nationalreihomes.com/real-estate-news-blog.html

Here's a good article about homeowners underwater and making the decision to walk away...

What Happens When You Walk Away From Your Home?
ReutersBy Chris Taylor | Reuters – Mon, Jan 30, 2012 4:43 PM EST

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It was just last summer that Charlotte Perkins made the hardest decision of her life as she and her husband Jim were caught in the vise of the housing bust.

Wanting to downsize their lives as they headed toward retirement, they bought a new house in Mesa, Arizona, before they sold the old one, also in Mesa. Their previous home had been appraised at nearly $400,000 at the height of the market, but as the housing crisis ravaged Arizona, they were told they'd be lucky to get $200,000 for it.

In my blog today I write about several topics in the news todays, such as Bank of America considering bankruptcy for it Country-Wide unit that holds troubled mortgages. http://nationalreihomes.com/real-estate-news-blog.html

The FHFA, Federal Housing Finance Agency, releases a monthly report of house prices, delayed around 45 days. So, November’s report just came out, and in general, it didn’t look terrible.

The FHFA calculates their indexes based on resale prices of homes with mortgages backed by Fannie Mae and Freddie Mac. They track nine Census

Divisions:

Pacific: Hawaii, Alaska, Washington, Oregon, California

Mountain: Montana, Idaho, Wyoming, Nevada, Utah, Colorado, Arizona, New
Mexico

West North Central: North Dakota, South Dakota, Minnesota, Nebraska, Iowa, Kansas, Missouri

West South Central: Oklahoma, Arkansas, Texas, Louisiana

East North Central: Michigan, Wisconsin, Illinois, Indiana, Ohio

East South Central: Kentucky, Tennessee, Mississippi, Alabama

It was a quiet week for meaningful real estate related news. However, there were a couple of stories of interest:

Mortgage Applications Surge

Last week mortgage applications jumped by 23% according to the Mortgage Bankers Association. Of course, record low interest rates are the reason. Last week mortgage rates hit new record lows:

• 30-year fixed rate 3.89%
• 15-year fixed rate 3.16%

82.2% of these mortgage applications were for refinancing, as home buyers are still not in the market at anywhere near historic levels. Some analysts point to this as illustrating that home sales aren’t overly interest rate sensitive. ARMs, Adjustable Rate Mortgages, that are resetting during this period are making borrowers happy. Many are enjoying lower rates after the reset.

At the beginning of the recession the last thing people imagined was a demand for US properties, especially homes, by foreign investors. But as is the case in cycles, what is truly of value but trading at a discount, can generate demand. Hence foreign investment seeing that normally reliable and financeable us real estate IS ON SALE. On sale means a discount from either intrinsic value of the property or the alternative investment value to the investor.

The discount of intrinsic value is linked to the property itself. A home selling at $50/sf when it costs $130/sf has intrinsic (long term or short term) value, let alone if its worth 100,00 today and selling for 50,000 today.

http://nationalreihomes.com/real-estate-news-blog.html

It depends on who is writing about it how you might view the December performance for new home construction and the outlook going forward. Two articles this week, one at the MSNBC site and the other over at CNNMoney used the same government reports but interpreted them differently for how new home construction is doing these days.

MSNBC

The article title is “Housing starts fell in December, capping a grim year.” Builders started just 606,900 homes last year, only slightly better than the previous two years. That’s roughly half of the 1.2 million starts that most economists consider a healthy market.